So much for rebuffing Carl Ichan and his calls to split the company: eBay today announced that it would split itself into two separate, publicly traded businesses, with an ex-American Express executive, Dan Schulman, heading up the new PayPal, and an eBay veteran, Devin Wenig, running the remaining eBay portal.
Schulman joins PayPal immediately as president and will step up to CEO after the separation.
The two new companies will continue to maintain a relationship through “arm’s length operating agreements,” eBay says, an arrangement that the company says “will create sharper strategic focus and better position each business to capitalize on those growth opportunities as independent companies.” It expects the spinoff, subject to regulatory and other approvals, to be completed by the second half of 2015.
As part of the separation, John Donahoe, eBay CEO, and CFO Bob Swan will be stepping down from their roles but will keep board positions.
“eBay and PayPal are two great businesses with leading global positions in commerce and payments,” said eBay Inc. President and CEO John Donahoe in a statement. “For more than a decade eBay and PayPal have mutually benefited from being part of one company, creating substantial shareholder value. However, a thorough strategic review with our board shows that keeping eBay and PayPal together beyond 2015 clearly becomes less advantageous to each business strategically and competitively. The industry landscape is changing, and each business faces different competitive opportunities and challenges.”
Schulman is an interesting choice for PayPal: at AmEx, his most recent title was group president of enterprise growth, where he has been at the front of the company’s push to embrace new technologies and new partnerships. Before this he was the president of Sprint’s prepaid group and also the founding CEO of Virgin Mobile — mobile expertise that will fit with PayPal’s own initiatives to take on mobile payments and the wider potential of mobile commerce.
It’s also a much-needed leadership appointment, given that PayPal has been without a permanent head since the departure of David Marcus to Facebook earlier this year.
PayPal currently has 152 million active registered accounts, growing 15% year-over-year last quarter. Revenue over the last 12 months grew by 19% over the prior year period to approximately $7.2 billion.
Over at eBay, Wenig is another vote for taking eBay further ahead into the future of how people are buying goods today. In his current role as president of the Marketplaces division, Wenig has steered eBay into new ways of distributing products, for example partnering with brick-and-mortar businesses for click-and-collect services that would bypass postage and delivery problems.
“This is part of the bigger picture,” Wenig told TechCrunch at the time of the click-and-collect launch in the UK. “This is the march around the world to bring offline and online together, and offer our consumers choice.”
After PayPal separates from eBay, the two parts that are left over — Marketplaces and eBay Enterprise — will become Wenig’s domain. Together these two had revenues of $9.9 billion in the last 12 months, with Marketplaces accounting for $8.7 billion of that. The total gross merchandise volume at the company last year was $85 billion — up 13% in the year. Today there are some 700 million live listings on the site at any moment.
In what is surely a reflection of the close relationship between PayPal and eBay — companies that were closely aligned even before eBay bought PayPal — eBay has nearly the same number of registered users as PayPal: 149 million active buyers.
But while PayPal has carried the mantle of mobile commerce, eBay is not too shabby on this front, either. The company says it has an installed base of 200 million mobile apps that bring it $20 billion in gross merchandise volume. Some 61% of its business is outside the U.S.
We’ll be listening to eBay’s webcast around the news at 8am Eastern and will update with more then.